Wary firms, candidates on fence slow top-level hiring

Headhunters, therefore, are hit by both sides, leading to mandates taking longer to close than usual—up to six months or even more. Companies in the IT, product services and retail sectors, for instance, want search firms to look into the past decade of candidates selected for CXO posts.

The compensation negotiations for middle and senior management have stopped and the changing demands of businesses are making HR firms rethink their decisions on candidates.

“There is a delay in closing open positions and clients are asking for competency and behavioural references that date back to a decade,” said Suresh Raina, partner at global executive search firm Heidrick & Struggles India.

On the candidates’ part, many CXOs are now regretting their decision of shifting firms quickly during a hiring frenzy about 16 months ago. “Until a year ago, senior management at ₹5-15 crore had changed firms and are now regretting their calls. They are available in the market, but are not in a hurry to take up another offer,” Raina said.

“Over the last 6-8 months, while mandates have opened up, companies are talking long to close positions,” said Anshuman Das, chief executive and co-founder of Careernet, a talent solutions provider. “During the hiring frenzy, while employees were given offers in a couple of weeks, now it is taking 4-6 months to hire as compared to 1-3mths earlier,”

The recruitment firm said companies are also looking at 95%-plus fitment, which even a year ago was 50-60%. The hikes while changing jobs are also now reasonably muted.

The delays reflect a selection process that a senior search firm executive calls “careful calibration”. The Delhi-based headhunter did not want to be named but highlighted that companies are now wary of making mistakes in recruitment that they made during the pandemic.

“Clients are talking about non-linear transformation and for that the number of candidates available is less. They are not in any hurry and are advised by the promoters and the Board to wait before they make a hire in haste,” this executive said.

Shiv Agrawal, managing director of ABC Consultants, said that while the time taken continues to be long, firms in the IT and finance sectors are at least talking about the mandates. “When markets get choppy, companies will take a longer time to decide. With IT sector slowing down, its domino effect was felt in the consumer sector as well since people movement became more cautious.”

After a year of frenzied recruitment in 2021 and the first part of 2022 that led to excess staff, many IT companies and startups have paused hiring due to budget crunch and poor visibility on deal pipelines. Recruiters for IT services companies are also worried that their sub-contracting costs will get reduced. However, manufacturing, automotive, and energy are sectors that are showing higher signs of ramping up.

Hiring companies are paid a certain percentage of the compensation of the candidate and if the person leaves before six months, the search firm will have to get a replacement without additional fees.

The timelines are getting stretched in middle to senior levels since the talent available at junior levels is filled in quicker via temporary route if permanent hiring is taking time. The fee in this case is a flat rate as the hirings are done on a large scale.